Why feminists should support childcare deregulation

The Abbott Government is examining childcare regulation as part of its 'cutting red tape' agenda.

ABC News: Andree Withey

We can't keep hoping that higher subsidies will cancel out the rising cost of childcare red tape - that's why we should support deregulation in the name of gender equity, writes Trisha Jha.

It used to be petrol prices and housing affordability, but the new 'BBQ stopper' occupying the minds and hip-pockets of ordinary Australians is childcare affordability and accessibility.

Fees for long day care have increased 4 per cent a year in real terms over the last decade, and demand is still unmet across service types in many areas. Despite the previous Labor government increasing fee subsidies and funding the establishment of new services, it is still difficult for parents to procure an affordable childcare place and solutions must be found elsewhere.

The Abbott Government is examining childcare regulation as part of its 'cutting red tape' agenda, alongside its Productivity Commission review of the childcare system. Advocates for childcare access should embrace this decision to consider deregulating the sector.

The benefits to women and to wider society through increased work participation and a broader tax base are many. Women, feminist organisations (such as the Women's Electoral Lobby Australia and the National Foundation for Australian Women), professional organisations and the business community all recognise that access to affordable childcare reduces barriers to employment. Employment is key to women's financial independence, and has benefits such as the means to leave negative or abusive relationships and an increased lifetime superannuation accumulation.

It is for these reasons that childcare subsidies were introduced in the 1980s, and is for these reasons that the problem of childcare access is worth investigating.

So what exactly is wrong with our childcare system? The short answer: the government.

The principal culprit is regulation, primarily through the objective of increasing the quality of services. While it may seem like a good thing at first glance, 'quality' in this context is not in the main about health, hygiene and safety, and nor is it about children in care being happy and safe.*

Instead, the federal and state compact that governs the majority of childcare services, the National Quality Framework (NQF), involves increasing reporting requirements, mandating a minimum standard for staff qualifications and lower staff-to-child ratios. These are allegedly markers of quality childcare.

A particular loser from these regulations is community and family day care (FDC). The pursuit of qualifications turns carers into educators, and limits who can run a legitimate FDC service. Competition is shut out as the costs of regulation are absorbed by larger, amalgamated providers while smaller care providers are unable to easily absorb the costs and may shut down. Reducing services in areas that may already be experiencing shortages negatively impacts both accessibility and affordability for women and their families, making deregulation in this area worthy of concern for feminists.

The costs of regulation are passed on to families through higher fees and on to the government through increased reliance on fee subsidies. A COAG report estimated that from 2009 to 2019, the additional costs of the NQF would be $1.6 billion in real (inflation-adjusted) terms, about 50 per cent of which would be borne by families. Childcare will become more unaffordable as well as inaccessible, mostly to the detriment of women.

Growth in costs has occurred, in part, due to the childcare industry, which has campaigned for quality assurances and accreditation processes. It has been accepted without complaint by comfortable and well-off parents who support the quality agenda. Prices have been pushed up for everyone by those who could afford to pay for bells and whistles, while low- and lower-middle-income earners have lost out.

Families seeking flexibility and choice have also lost out. Paperwork that detracts from supervision of children - as many submissions from providers to the Productivity Commission inquiry attest - is surely the opposite of the quality most parents would want for their children. Moreover, regulatory constraints on supply (which local councils also influence through planning and zoning restrictions) have resulted in a decline of care services like FDC. More stringent minimum standards for FDC mean parents have less options when entrusting their child into care and, often, inconvenient and expensive long day care becomes the only option.

Not having access to childcare also has regressive impacts. Higher-income women can keep up more easily with the costs of childcare, while lower-income women find that it costs too much to go back to work and bear the brunt of the resulting inequities, especially in the event of family breakdown.

The grim truth is that the childcare sector is a classic case of regulatory capture, where larger players such as Early Childhood Australia and Goodstart Early Learning shape the regulations that govern the industry. The prevalence of fee subsidies guarantees money from the government ($4.7 billion in 2012-13) and has given providers a certain degree of immunity to the usual rules of supply and demand.

For a long time, the debate over childcare affordability and availability has involved advocating higher subsidies and increased levels of regulation simultaneously, hoping the two will cancel each other out and supply will be unaffected. Unfortunately, this is not the case. Those who advocate for childcare access in the name of gender equity and feminism must decide whether they want to support the interests of providers, or the interests of their fellow working women.

*Editor's note: the words "in the main" were added to this sentence on March 28.

Trisha Jha is a policy analyst at the Centre for Independent Studies. View her full profile here.